Yesterday’s Advisor pondered the issue of how much nonexempt work an exempt employee may do; today, issues around the executive exemption plus an introduction to Managing an HR Department of One.
Once again, we turn to BLR/HRHero’s Wage & Hour Self-audit Guide: Practical Solutions for HR for guidance.
The DOL’s tests for the executive exemption include terms like “management,” “customarily,” and “particular weight.” But what do those terms actually mean in FLSA land?
The Executive Exemption Salary Test
To qualify for the executive exemption, a worker must earn at least $455/week ($330 in American Samoa).
The Rest of the Test
In addition to the salary test, exempt employees must meet the following requirements (terms in boldface are defined below):
- Primary duty consists of management of the enterprise in which the employee is employed or of a customarily recognized department or subdivision of the enterprise.
- Customarily and regularly directs the work of two or more other employees.
- Has the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring, firing, advancement, promotion, or any other change of status of other employees are given particular weight.
Management
“Management consists of activities such as the following:
- Interviewing, selecting, and training employees
- Setting and adjusting the rates of pay and hours of work of employees
- Directing the work of employees
- Maintaining production or sales records for use in supervision or control
- Appraising the productivity and efficiency of employees for the purpose of recommending promotions or other changes in their status
- Handling employee complaints and grievances
- Disciplining employees
- Planning the work of employees
- Determining the techniques to be used to perform the work
- Apportioning the work among the employees
- Determining the type of materials, supplies, machinery, equipment, or tools to be used of merchandise to be bought, stocked, and sold
- Controlling the flow and distribution of materials or merchandise and supplies
- Providing for the safety and security of the employees or the property
- Planning and controlling the budget
- Monitoring or implementing legal compliance measures
Customarily and Regularly
The term “customarily and regularly” refers to a frequency that is greater than occasional, but may be less than constant. This includes work normally and recurrently performed every workweek, but does not include isolated or one-time tasks.
Two or More Employees
“Two or more employees” is defined as two full-time employees or their equivalent. One full-time and two half-time employees, for example, are equivalent to two full-time employees. Four half-time employees are also equivalent.
Managing an HR Department of One was recently recognized as one of SHRMStore’s “Great 8” best-selling products. Examine it at no cost or risk for 30 days and find out what all the buzz is about.
Particular Weight
Exempt executives must have the authority to hire or fire other employees or their suggestions must be given particular weight. The term “particular weight” is defined by a set of factors to consider, including:
- Whether it is part of the employee’s job duties to make such suggestions and recommendations
- The frequency with which such suggestions and recommendations are made or requested
- The frequency with which the employee’s suggestions and recommendations are relied on by others.
Note on Business Owners
The exempt executive category also includes business owners who are defined as:
- Any employee who owns at least a 20 percent equity interest in the enterprise; and
- Who is actively engaged in its management
Feel as if you’re all alone in HR? Take on a partner—Managing an HR Department of One. Examine it at no cost or risk for 30 days. Get more information.
BLR’s Managing an HR Department of One is unique in addressing the special pressures small HR departments face. Here are some of its features:
- Explanation of how HR supports organizational goals. This section explains how to probe for what your top management really wants and how to build credibility in your ability to deliver it.
- Overview of compliance responsibilities, through a really useful, 2-page chart of 23 separate laws that HR needs to comply with. These range from the well-known Fair Labor Standards Act (FLSA), Family and Medical Leave Act (FMLA), and new healthcare reform legislation, to lesser-known, but equally critical, rules such as Executive Order 11246. Also included are examples of federal and state posting requirements. (Proper postings are among the first things a visiting inspector looks for—especially now that the minimum wage has been repeatedly changing.)
- Training guidelines. No matter the size of your company, expect to conduct training. Some of it is required by law; some of it just makes good business sense. Managing an HR Department of One walks you through how to train efficiently and effectively with a minimum of time and money.
- Prewritten forms, policies, and checklists. These are enormous work savers! Managing an HR Department of One has 46 such forms, from job apps and background check sheets to performance appraisals and leave requests, in both paper and on CD. The CD lets you easily customize any form with your company’s name and specifics.
If you’d like a more complete look at what Managing an HR Department of One covers, click the Table of Contents link below. Or, better yet, take a look at the entire program. We’ll send it to you for 30 days’ evaluation in your own office with no obligation to buy. Click here, and we’ll be happy to make the arrangements.